New Rules for Medicaid Mental Health Parity

The Mental Health Parity Act was a law passed in 2008 which required insurance companies to provide the same level of coverage for behavioral health problems and substance abuse treatment as it would for a surgical procedure. On Monday, the Obama administration announced that Medicaid recipients, covered by managed care organizations or alternative benefit plans, would be granted the same access to mental services as those covered by private insurers, The Wall Street Journal reports.

The Affordable Care Act (ACA) of 2010 expanded mental health and substance-abuse coverage by mandating that all individual and employee insurance plans cover mental health. However, only states that expanded the Medicaid program under the ACA were required to meet parity requirements.

“It deals with people not in the expansion population who are in managed care plans, which is increasingly dominating the market,” said Andrew Sperling, director of Legislative Advocacy at the National Alliance on Mental Illness.

The rule will stop limits on mental health coverage for Medicaid recipients who have managed care plans, but will not affect those on Medicaid fee-for-service plans. States will be mandated to include provisions requiring mental health parity for Medicaid managed care, according to the article. The rule prohibits states from singling out mental health or substance-abuse treatment from managed care contracts.

“It’s significant,” said Timothy Jost, a professor at the Washington and Lee University School of Law. “The mental health parity law preceded the ACA and it’s an issue people have been battling about for some time. A significant number of people with mental health problems are on Medicaid.”

About 30% of all Medicaid dollars go towards people with mental health needs, the article reports. With 70% of the Medicaid population on managed care plans, the new rule will provide greater access and better treatment for those battling with substance use disorders or other behavioral health issues.

“It’s going to be nearly 10 years from the date the law was passed to get our act together and ensure parity,” said Patrick Kennedy, founder of the Kennedy Forum, which advocates for mental health care.